The Arab Spring uprisings brought about unprecedented opportunity for change and reform to the Middle East and North Africa region. Since then, much has happened: new governments have come to power in Tunisia, Egypt, Libya, and Yemen. However, with this change numerous challenges have confronted political transitions across the region as nations strive to build institutions, erect new political and legal frameworks, and lay the foundations for economic prosperity. In Yemen, security threats and humanitarian crises have frequently overshadowed the National Dialogue process, which, though marred by challenges such as sectarianism, security threats, and humanitarian concerns, shows great promise for helping to build a better Yemen.

The importance of economic reform was highlighted at an event sponsored by CIPE on January 25, 2013, entitled “Yemen’s Ongoing National Dialogue: Moving Forward” featuring Amat Al Alim Alsoswa, Former Assistant Secretary-General, Assistant Administrator and Director of the Regional Bureau for Arab States, United Nations Development Programme (UNDP) & Former Minister of Human Rights for Yemen. Alsoswa emphasized that a successful democratic transition and security in Yemen will only be sustained if Yemeni citizens enjoy greater access to economic opportunities.

The National Dialogue is designed to include all relevant stakeholders in rebuilding the political and legal framework that governs Yemen. No other country in the region is undergoing such a process. This historic step may help Yemen avoid the kinds of post-revolution growing pains experienced elsewhere. The National Dialogue is crucial for the future of the country as it may help reshape Yemen’s politics, law, and society, and will determine whether the country has the institutional framework to tackle challenges such as security, humanitarian needs, and the troubled economy.

Among the most important tasks of the National Dialogue is addressing the economic issues that were among the root causes of the 2011 revolution. To create a legal framework that will support economic growth, input in the National Dialogue needs to come from outside the government, especially from the business community.

Under the regime of former Yemeni President Ali Abdullah Saleh, the Yemeni private sector was largely disengaged politically and silent on government policy. However, the fall of Saleh’s regime has created a more open and inclusive political space, potentially allowing the private sector to help craft viable and responsive economic policies. To capitalize on this new opportunity to promote market-based economic reform, CIPE has worked closely with a group of Yemeni business leaders, as well as local partners such as the Human Rights Information Training Center (HRITC), the Political Development Forum (PDF) and the Studies and Economic Media Center (SEMC).

Through this work in Yemen, CIPE has helped relevant stakeholders to draft a “Private Sector Vision” reflecting their priorities for democratic governance, economic reform, and development. Furthermore, CIPE has helped a local team of business leaders to build consensus around this document at the local, national, and international levels and will continue to help ensure that the private sector has a voice in the National Dialogue process. Partially as a result of this work, Yemen’s private sector has, for the first time, begun to work cooperatively to develop a plan to strengthen Yemen’s business climate, to build local and international support for private sector reform, and to address specific areas of concern for the private sector.

The private sector is the link between politics and economics, with the capacity to temper policymaking and serve as the engine of sustainable economic growth, so the importance of building a healthy, mobilized private sector cannot be overstated. The economy is a key rallying point to unify Yemen’s disparate political groups. With the inclusion of the private sector in the National Dialogue, the economy can serve as an integrating, rather than disintegrating force.

There is a remarkably long way to go toward creating a stable economic and political system in Yemen, but what has been accomplished not only demonstrates the power of an organized private sector, but also encourages cautious optimism for Yemen’s future.

Matthew Godwin is Program Assistant for the Middle East & North Africa at CIPE.

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The CIPE Development Blog provides coverage of the Center for International Private Enterprise and its partner network at work -- highlighting successes, drawing out lessons from failure, and exploring the broader issues of political and economic development. For more information visit CIPE.org.